That all-important credit score you need when applying for a loan may be the work of several credit agencies. One of these, Dublin-based Experian, has been around since 1996 and as of 2013 operated four major divisions, including Consumer Credit Services. In its rather brief existence, Experian has developed into a global leader in the burgeoning information services industry.
Experian originated in 1996 with the merger of TRW Information Systems -- then the largest credit-rating bureau in the U.S. -- and CCN, a UK-based information company. In 2006, Experian's parent company, GUS, spun it off, and by 2013 Experian had operations in 44 countries as well as a U.S. headquarters in Costa Mesa, Calif.
Credit Reports and Disputes
Along with TransUnion and Equifax, the other major U.S. credit bureaus, Experian markets its credit information not only to lenders but also to consumers, who can sign up for a fee-based credit monitoring program. By the Fair Credit Reporting Act, however, these agencies must provide individuals in the U.S. with a credit report, free of charge, once a year on request. You can dispute the information in a credit report; Experian routes these cases through its National Consumer Assistance Center in Texas.
FICO and PLUS
At one time, Experian used the credit rating formulas generated by the Fair Isaac Corporation, also known as FICO, to gauge consumer creditworthiness for the use of potential lenders. However, a disagreement between the two companies led to a parting of the ways, and Experian now employs its own scoring method, known as the PLUS score. PLUS scores range from 330 to 830, rather than FICO's 300 to 850. Experian does not disclose the formula it uses to arrive at the PLUS score, although the major ingredients are payment history, the ratio of outstanding balances to credit limit, length of credit history and number of credit inquiries.
Marketing Credit Scores
Creditors employ many different credit scores to determine creditworthiness, including FICO and the VantageScore, which is generated by the three rating agencies in combination. Therefore Experian's own PLUS score may not be an accurate gauge of the number that lenders are using to make their decisions. Instead, the PLUS score is primarily designed as an educational and marketing tool, designed to inform consumers about the general state of their credit and to generate revenues for the company through credit-monitoring products.
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